Firms largely ignore uncertainty when disclosing greenhouse gas emissions in their annual reporting

Purpose Corporate greenhouse gas (GHG) emissions disclosures increasingly inform investment, procurement and policy decisions, but when emissions are reported without acknowledging uncertainties, it risks misleading stakeholders, misdirecting capital and undermining climate action. This study aims to examine whether and how firms report emissions uncertainty in practice. Design/methodology/approach The study reviews uncertainty analysis requirements in measurement and disclosure standards, and analyses sustainability reports from 2,636 listed firms using automated text analysis and manual review to identify whether and how uncertainty was disclosed. Findings While measurement and disclosures standards have optional requirements for uncertainty analysis, the findings show that of the 2,102 reports that disclosed emissions, 2,052 (97.6%) reported only single-value estimates without uncertainty analysis. Only 50 (2.4%) explicitly discuss the impact of relevant uncertainties on GHG measurements: 38 qualitatively, and just 12 (1%) quantitatively. This is consequential as some firms claim small year-on-year reductions (that may sit within much larger unreported ranges of uncertainty. Research limitations/implications The study focuses on publicly available reports from major stock exchanges, mainly in North America and Europe, which may not reflect all global practices. Automated text analysis may have misclassified some reports, although manual checks helped reduce errors. Practical implications Optionality should be removed in measurement standards (GHG protocol) and disclosure standards (e.g. GRI, IFRS, ESRS). The lack of uncertainty analysis in disclosures may impede decision-making and drive misallocation of capital and resources to decarbonisation projects based on uncertain data. Social implications Without acknowledging uncertainty, firms reduce the transparency and legitimacy of their emissions disclosures. This undermines stakeholders’ ability to hold firms to account for their climate impacts and weakens the policy feedback essential for effective sustainable development. Originality/value To the best of the authors’ knowledge, this study provides the first large-scale empirical evidence that the absence of uncertainty analysis is widespread in corporate emissions disclosure.